Asian stocks rallied Tuesday, led by a stronger Chinese opening and by shaking off the initial drag of technology-driven losses on Wall Street, while the dollar remained at its multi-week lows against other major currencies.
MSCI’s widest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) gained 0.2%, reaching positive territory after Chinese blue chips (.CSI300) rose 0.13%. South Korea (.KS11) gained 0.4%.
Elsewhere, Japan’s Nikkei (.N225) fell 1.84% as the country continues to grapple with a resurgence in COVID cases. Australia (.AXJO) fell 0.33%.
Hong Kong (.HSI) was down 0.11%, although shares of Chinese food supplier Meituan (3690.HK) were up 1.59% after the company said it raised a massive $ 9.98 billion through a sale of stocks and convertible bonds.
Earlier, the major Wall Street indices pulled back at record highs for the week, with strong resistance from Tesla Inc (TSLA.O).
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“This morning in Asia looks like a continuation of what we saw last night where US technology stocks were hit,” said Mick McCarthy, Chief Markets Strategist, CMC Markets.
McCarthy said the declines in Japan were striking given the strength of the yen triggered by the declining dollar, which would normally be favorable to Japanese equities, adding that he thought this was one day would change in some other way.
The tech-heavy Nasdaq (.IXIC) was the top player with a 0.98% decline, while the Dow Jones Industrial Average (.DJI) fell 0.36% and the S&P 500 (.SPX) fell 0.53% .
However, the e-mini futures for the S&P 500 were up 0.13%, suggesting markets may recover later in the day.
In the currency markets, the dollar continued its recent weakness, falling further from its six-week low on Monday.
“In our view, the USD could remain heavy this week as the focus shifts from the US economic outperformance to the broader improving global economic outlook,” CBA analysts wrote in a research note.
In Asian trade, the dollar fell 0.08% against the yen, while the Australian dollar gained 0.14% and the euro 0.07% against the dollar.
Benchmark 10-year Treasury yields rose to 1.6029% compared to the US close of 1.599%.
Oil prices continued to rise. US crude oil rose 0.19% to $ 63.50 a barrel and Brent crude oil rose to $ 67.2 a barrel.
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